Founder's syndrome (also founderitis) is the difficulty faced by organizations where one or more founders maintain disproportionate power and influence following the effective initial establishment of the organization, leading to a wide range of problems. The passion and charisma of the founder(s), sources of the initial creativity and productivity of the organization, become limiting or destructive factors. The syndrome occurs in both non-profit and for-profit organizations. It may simply limit further growth and success of the project, or it may lead to bitter factionalism and divisions as the scale of demands made on the organization increases, or it may result in outright failure. There are ways in which a founder or organization can respond and grow beyond this situation.
An organization suffering from founder's syndrome typically presents many of the following symptoms:
- The organization is strongly identified with the founder; a result sometimes believed to be related to the founder's ego.
- The founder makes all decisions, big and small, without a formal process or input from others. Decisions are made in crisis mode, with little forward planning. Staff meetings are held generally to rally the troops, get status reports, and assign tasks. There is little meaningful strategic development, or shared executive agreement on objectives with limited or a complete lack of professional development. Typically, there is little organizational infrastructure in place, and what is there is not used correctly. Furthermore, the founder has difficulty making decisions that benefit the organization because of their affiliation.
- There is no succession plan.
- The founder has difficulty with adapting to changes as the organization matures.
- Key staff and board members are typically selected by the founder and are often friends and colleagues of the founder. Their role is to support the founder, rather than to lead the mission. Staff may be chosen due to their personal loyalty to the founder rather than skills, organizational fit, or experience. Board members may be under-qualified, under-informed or intimidated and will typically be unable to answer basic questions without checking first.
- Professionally trained and talented recruits, often recruited to resolve difficulties in the organization, find that they are not able to contribute in an effective and professional way.
- The founder begins to believe their own press/PR and other marketing related issues.
- The founder, who is usually the CEO or managing director, suffers HiPPO (Highest-paid-person's opinion), which means that often their ideas, decisions, etc. keep winning over the actual better ideas, decisions, etc.
- The founder becomes increasingly paranoid as delegation is required, or business management needs are greater than their training or experience.
- The founder responds to increasingly challenging issues by accentuating the above, leading to further difficulties. Anyone who challenges this cycle will be treated as a disruptive influence and will be ignored, ridiculed or removed. The working environment will be increasingly difficult with decreasing public trust. The organization becomes increasingly reactive, rather than proactive. Alternatively, the founder or the board may recognize the issue and take effective action to move beyond it as outlined below.
Coping with founder's syndrome requires discussion of the problem, a plan of action, and interventions by the founder, the board, and/or by others involved in the organization. The objective of the plan should be to allow the organization to make a successful transition to a mature organizational model without damage to either the organization itself or the individuals concerned.
- Despite the negative and positive symptoms listed above, according to one study focused on "knowledge-intensive technology" companies, founders with a so-called hands-on management style are more likely to retain employees and see their firms thrive.
- On the contrary to the founder's ego issue, overconfidence can be seen as a positive attribute.
- Kleibrink, Maryll (December 2004). "Diagnosis: Founderitis". Executive Update. ASAE. Retrieved 24 May 2011.
- Adler, Carlye (8 May 2007). "Time to replace yourself". CNN Money. CNN. Retrieved 24 May 2011.
- "Surviving Founder's Syndrome". National Resources Centre. Archived from the original on 2008-12-24. Retrieved 2008-11-22.
- "Founder's Syndrome". BoardSource. Retrieved 2019-03-26.
- Block, Stephen (June 2002). "Toward an Understanding of Founder's Syndrome: An Assessment of Power and Privilege Among Founders of NonProfit Organizations". Nonprofit Management and Leadership. 12 (4): 353–368. doi:10.1002/nml.12403 – via ResearchGate.
- "WeWork and the dangers of founder ego". www.managementtoday.co.uk. Retrieved 2019-09-26.
- "Rediagnosing "Founder's Syndrome": Moving Beyond Stereotypes to Improve Nonprofit Performance". Non Profit News | Nonprofit Quarterly. 2019-03-07. Retrieved 2019-03-26.
- Shah, Dave (2018-05-18). "3 Signs the Best Move for Your Business Is to Hire Somebody Else to Run It". Entrepreneur. Retrieved 2018-08-24.
- "Founder's Syndrome? Who me?". Help4NonProfits. Retrieved 2008-11-22.
- Miller, Kelly (2019-07-25). "The Top 10 Marketing & Communications Mistakes Startup Founders Make — and How to Avoid Them". Medium. Retrieved 2019-08-18.
- "Beware: This Hippo Kills Your Company!". Corporate Rebels. 2018-12-06. Retrieved 2019-08-18.
- Silverberg, David (2017-04-20). "Why you need to question your hippo boss". BBC News. Retrieved 2018-08-24.
- Adrenaline junkies and template zombies : understanding patterns of project behavior. Tom DeMarco. New York, NY: Dorset House Pub. 2008. ISBN 978-0-13-349228-6. OCLC 891469430.CS1 maint: others (link)
- "Founder's Syndrome: How Corporations Suffer -- and Can Recover". Free Management Library. Retrieved 2008-11-23.
- Gerdeman, Diana (2018-07-17). "THE MOST SUCCESSFUL STARTUPS HAVE HANDS-ON FOUNDERS". Retrieved 2018-07-28.
- Lebowitz, Shana. "Why Andreessen Horowitz bets on 'egomaniacal' and 'partly delusional' founders being the must successful". Business Insider. Retrieved 2019-08-18.